Cloth simulation not working properly
The problem is that your Distance setting is too high/large. There are two places where Distance is specified, and they are different settings. 

One of them is the distance from the mesh that collision objects will be considered "colliding." If you set this too high, the mesh will behave as though it's colliding, even though it's not touching. If you set this too low, the mesh might move too far over the course of a frame, and the collision will never be detected.

The other place that Distance is specified is specifically for the cloth interacting with itself. Another part of the cloth that is within the specified distance will be considered "self-colliding." Similar principles apply.